USV Annals of Economics and Public Administration (Dec 2023)
APPLICATION OF PROFESSIONAL JUDGEMENT IN THE RECOGNITION OF PROVISIONS. THE CASE OF BSE LISTED COMPANIES
Abstract
The nature, opportunity and value of provisions should be disclosed in the explanatory notes to provide full information to interested parties. This work focused in particular on the analysis of provisions, because over time, provisions have been difficult to interpret due to their subjective and cashless nature, and these features describe their vulnerability to manipulation. The research objectives of the authors are aligned along the following lines: on the one hand, to present the aspects concerning the recognition and valuation of provisions, i.e., to detail the main peculiarities of provisions, according to IAS 37, and, on the other hand, to analyse the implementation of the international standard IAS 37 ,,Provisions, contingent liabilities and contingent assets" in entities listed on the BSE. Another objective is to detail the specifics of provisions, i.e. the recognition and measurement of environmental provisions under IAS 37. Thus, the authors aim to analyse the presence of provisions reported by entities listed on the BSE, as well as the areas in which these items are of significant importance. The part allocated to the research methodology aims at a three-year analysis, from 2019 to 2021, of BSE-listed entities on the implementation of IAS 37 "Provisions, Contingent Liabilities and Contingent Assets" by these entities, by presenting the values and reported elements of provisions.The subject under review is a topical one, of interest to all stakeholders, and has been extensively analysed, with different views expressed on the importance of provisions within a company, both nationally and internationally.
